Unfazed by the anti-trust settlement Microsoft Corp reached with the U.S. government last week, the European Commission said on Monday its investigation of the software giant was continuing. 

"The investigation is ongoing and it's at a preliminary stage,'' a Commission spokeswoman Amelia Torres told reporters Monday.

The European Commission said in August it was investigating whether Microsoft was trying to damage rivals by embedding its proprietary audio and video software, Media Player, into its Windows operating system. 

It said then it was combining this case, in which it issued a formal statement outlining its concerns, with a similar case covering Windows 98. 

Asked whether the U.S. settlement would have any effect on the EU probe, Torres said: "It's much too early to say. There might be certain features in the U.S. settlement which might or might not have an impact on the Commission's own investigation involving Microsoft.'' 

She said Microsoft still had to reply to the statement of objections sent in August. She expected Microsoft would request a hearing which would take place before Christmas.

On Friday, the Justice Department and Microsoft asked U.S. District Judge Colleen Kollar-Kotelly to approve a settlement of antitrust charges that would set new rules for the nation's hard-hit technology industry.

Kollar-Kotelly agreed to review the settlement and gave the 18 states and District of Columbia until Tuesday to determine whether they would back the pact.

The settlement would allow computer manufacturers to work with other software developers and place their products on Microsoft's Windows system, and prevent the software giant from punishing anyone who makes or uses competing products.

It would also require the software giant, credited with helping drive the technology revolution of the last decade, to provide software developers the necessary interfaces to inter-operate with Windows as well as offer uniform licensing terms to key computer makers.

According to a source familiar with the settlement talks, the deal could come under criticism from the states for not doing enough to stop Microsoft from bundling new software applications into Windows and failing to force the company to disclose enough of the operating system's inner workings.

But antitrust experts said the states are under pressure to go along with the Justice Department deal. The states would be unlikely to get a tougher remedy on their own, they said.

Reuters and the Associated Press contributed to this report.